Suruma Attacks Mutebile On Exploitative Foreign Banks

website buy geneva; font-size: small; line-height: 200%;”>Unfortunately, and apart from Centenary bank which somehow still lingers among the top five, most of these banks are foreign owned.

Worse still recent research has indicates 50 percent of all commercial bank deposits in the country lie in only 3 of these foreign owned banks.

Adressing Makerere University students Wednesday on some of the huddles faced in accessing financing by Small and Medium Enterprises, former Finance Minister Prof Ezra Suruma blamed the current situation on what he termed as ‘stupid finance laws in the country.’

Uganda, Suruma said, is in a serious crisis of not just expensive but completely unavailable capital infrastructure which threatens stagnating the economy ceaselessly, since natives will be unable to start up their own businesses and therefore remain job-seekers in foreign-owned companies.

Using an elementary economic principle, he put it that government would not manage to cook food for its people when one of the three cooking stones – capital is missing, [the other ones being land and labor].


Uganda’s current Central Bank Rates [CBR] are among the world’s top 5.

This has provided grounds for commercial banks to keep come up with a few other excuses to shoot up their lending rates, rendering Ugandans access loans at a staggering 30 percent and more.

This is why, according to Suruma, the government has to be seen to invest in helping Ugandans start up their own financial institutions where they can access cheaper financing for entrepreneurship.

“Ugandans have to come together and insist to government that financial infrastructure is most critical for economic growth and development. We must access capital which is our own or we will remain stagnant,” he said.

“I therefore urge you to be disciples of Ugandan owned and managed financial institutions, and by this, you have to fight for just rules and laws that favor Ugandans to form, operate and control their own financial institutions.”

Economy crumbling

He further noted the current laws do not favor this and that’s why most Ugandan-started banks have crumbled.

He cited a law that bars Ugandans from owning more than 30 percent of a microfinance institution.

“This is a stupid law. And we have many other stupid laws that must be rejected and amended,” he said.

“If Tumusiime Mutebile, [Governor Bank of Uganda was here, I would tell him that his job should be to help assist Ugandans to stay in the Banking sector rather than driving them out,” he charged.

“What the Central Bank is doing is to make life difficult for those Ugandans that have a dream of stating up their own financial institutions. The moment you take that proposal to the bank, they will ensure that you don’t have a single good night sleep!”

In one of its financial reforms in 2010, Bank of Uganda raised its Minimum Capital Requirements for setting up a commercial bank from sh 4bn to 25 billion.

According to Suruma, by doing this, the governor knew that a Ugandan would have to ‘steal’ to be able to raise such and amount of money and remain with a balance to run the institution.

He therefore advocated for the anticipated oil revenues to be deliberately and substantially invested in starting up Ugandan Commercial banks such as the Agricultural bank, the Industrial, as well as inject more funds in the Housing Finance bank so that people can have access to cheap financing to start up numerous much-need enterprises of their own.

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